Wednesday, February 1, 2012

Are Economists Selfish? A Review of the Literature

From The Stand-Up Economist:

Econlib’s previous discussion of my NYT op-ed
was sidetracked, so in the interest of bringing the focus back to the
question of whether or not economists are selfish and (if so) whether
economics educations makes them so, I am offering up a selected lit
review. I do not claim that this lit review is complete or unbiased, but
I do claim that it will make you think twice about dismissing my work.
More comments from me at the bottom, and for even more on the existing
literature I recommend the discussions in Frey and Meier (2003), Wang et
al. (forthcoming)—both discussed below—or my peer-reviewed journal article with Elaina Rose.

Marwell and Ames, 1981.“Economists free ride, does anyone else?”Journal of Public Economics
15: 295-310. They conducted a public-goods game by giving individuals
250 “tokens” and asking them how many tokens they wanted to invest on an
“individual exchange” versus a “group exchange”; payoffs were set up to
create a tragedy-of-the-commons situation, i.e., each individual can
maximize their own payoff by free-riding, but if everybody invests in
the group exchange then everyone is better off than if everybody invests
in the individual exchange. They found that contributions to the group
exchange from economics graduate students were about half those from
others (20% versus 41%). They also asked questions about “fairness” and
noted: “There was surprising unanimity of thought [among everyone except
the econ grad students] regarding what was considered fair… [In
contrast, m]ore than one-third of the economists either refused to
answer the question regarding what is fair, or gave very complex,
uncodable responses. It seems that the meaning of ‘fairness’ in this
context was somewhat alien for this group. Those who did respond were
much more likely to say that little or no contribution [to the group
exchange] was ‘fair’. In addition, the economics graduate students were
about half as likely as other subjects to indicate that they were
‘concerned with fairness’ in making their investment decision.”...

...B. Frank and Schulze, 2000.“Does economics make citizens corrupt?”Journal of Economic Behavior and Organization
43:101-113. Their experiment involved giving students an opportunity to
receive a bribe (up to a maximum of about $72) for recommending a
plumber. Of the 190 students sampled, one name was randomly chosen to
actually receive whatever bribe they had designated: “In this paper, we
report on an experiment on corruption which investigates various
determinants of corruptibility. We found that economics students are
significantly more corrupt than others, which is due to self-selection
rather than indoctrination.”

Frey and Meier, 2003.“Are political economists selfish and indoctrinated? Evidence from a natural experiment”, Economic Inquiry
41:448-462. This study is very similar to my work with Elaina Rose in
that it looks at donations by students, in this case at the University
of Zurich, where students are asked if they want to donate small sums to
“a fund that offers cheap loans to needy students” and/or “a second
fund supporting foreigners who study at the University of Zurich.” They
find that “[p]olitical economists (to use the classical term) are not
more selfish than the average student, but students of business
economics are” and that “[the] higher level of selfishness of business
students is due to self-selection, not indoctrination.”...MORE